CBOE

Cboe is a scaled, high-quality market infrastructure franchise with durable moats in listed options (especially index options like VIX-related products), clearing, and proprietary market data, where liquidity begets liquidity and switching costs are real. The new multi-year collaboration with CNBC (daily live coverage from the Chicago trading floor) is strategically sensible: it reinforces Cboe’s brand in options education and can support retail and advisor engagement in a product set that benefits from higher participation. Volume is also broadening beyond core U.S. options, with March 2026 FX Spot average daily notional value hitting a record $74.5B (+42.9% vs March 2025), signaling diversification traction.

Financially, Cboe looks strong: management reported full-year 2025 net revenue of $2.4B (+17% YoY) and adjusted diluted EPS of $10.67 (+24% YoY), with Q4 2025 net revenue up 28% to a record $671M. At about $296 per share, the stock trades near 26x trailing earnings (EPS about $9.30) with a market cap around $25.7B, which is not cheap for an exchange but reasonable if mid-teens earnings growth persists. Shareholder returns are steady rather than high-octane: the annual dividend rate is $2.88 (about 1.0% yield) with a $0.72 quarterly dividend declared for Q1 2026.

Over the next 12 months, the core thesis is that Cboe can compound earnings through operating leverage in its data/derivatives franchise and continued multi-asset expansion, but the stock’s multiple leaves less room for disappointment. Near-term catalysts include the May 1, 2026 Q1 print (Street EPS expectation cited at ~$2.98) and continued evidence of sustained growth in FX/SEF volumes and net capture. Key risks are a volatility/volume downturn (which would pressure transaction revenue), regulatory or competitive fee pressure, and execution risk if strategic portfolio changes distract from the core options/data engine.

Recommendation: HOLD. The business quality and growth profile are attractive, but the valuation already reflects a lot of that optimism while earnings remain meaningfully exposed to cyclical trading activity.